Savings Or High Income Funds

The_Fiddler_2

Are Savings or High Income Funds better in this climate for money that won't be touched for a few years?

dunstonh

The_Fiddler wrote: »

Are Savings or High Income Funds better in this climate for money that won't be touched for a few years?

Thats a bit like saying whats better, eggs or bananas?

High income funds are typically medium to medium/high risk whereas savings is cash and nil risk (ignoring recent solvency issues obviously).

Its a bit of a jump to go from nil risk to medium/high and ignore the inbetween.

The_Fiddler_2

What is in between?

The_Fiddler_2

As Funds go, I didn't think High Income ones were that risky - are they really?

dunstonh

The_Fiddler wrote: »

As Funds go, I didn't think High Income ones were that risky - are they really?

The sector has some lower risk examples and higher risk examples. It really depends on their weighting to certain industries. However, generally, on 1 -10 scale (1=cash) then these come out between 6 and 8.

The_Fiddler_2

How does that risk compare to funds in general? Are there lower risk categories?

Nomad25

This post may help you, I'm just going through it myself:

http://forums.moneysavingexpert.com/showthread.html?t=1313511

dunstonh

The_Fiddler wrote: »

How does that risk compare to funds in general? Are there lower risk categories?

You can get unit trust funds from risk 2 through to risk 10. (again, treating cash as 1). One thing to note is that the last 12 months has seen investments that are historically known as low risk suffer greater losses than they normally would. So, just because its low risk, its doesnt mean you dont face a risk of loss. However, in the long run, you would expect the degree of loss to be lower than the higher risk funds.

gozomark

the reason why high income funds yield more than savings is because they are higher risk - you have to decide if the higher yield compensates you for your taking on the higher risk

The_Fiddler_2

gozomark wrote: »

the reason why high income funds yield more than savings is because they are higher risk - you have to decide if the higher yield compensates you for your taking on the higher risk

Yes I know that , but I was wondering where high income funds lay in the scheme of funds generally hence my questions.

The_Fiddler_2

dunstonh wrote: »

You can get unit trust funds from risk 2 through to risk 10. (again, treating cash as 1). One thing to note is that the last 12 months has seen investments that are historically known as low risk suffer greater losses than they normally would. So, just because its low risk, its doesnt mean you dont face a risk of loss. However, in the long run, you would expect the degree of loss to be lower than the higher risk funds.

Is there anywhere that tabulates this data?

Thanks for your answers dunstonh